The Daily Galaxy reports on the inverse relationship between self-esteem and materialism:
Researchers have found that low self-esteem and materialism are not just a correlation, but also a causal relationship where low self esteem increases materialism, and materialism can also create low self-esteem. The also found that as self esteem increases, materialism decreases. . . . The paradox that findings such as these bring up, is that consumerism is good for the economy but bad for the individual.
The study announcing this finding was by Lan Nguyen Chaplin (University of Illinois Urbana-Champaign) and Deborah Roedder John (University of Minnesota), to appear in the Journal of Consumer Research.
This is actually not too surprising. As humans, we naturally gravitate towards identifying ourselves as part of a group. Material possessions both unify and divide groups of people.
Ownership of things can unite people, as in groups who acquire things for hobbies or collections. People who own a particular computer or work with a specific piece of software may bond initially for sharing information and evolve into something of a social group.
At the same time, material objects that connote a certain economic or social status, all the way from clothing to vacation plans, to additional residences and other luxury status items, give us the opportunity to compare ourselves to others (and vice-versa) in a positive or negative way. Acquisition of items that imply a certain level of social status create a temporary boost in self-esteem that lasts only until someone else gets something better. It creates an environment in which one's worth as a person is intrinsically tied to the worth of his possessions.
I have been trying to follow the example of many other happy and satisfied people I know to pare down my wants list until it more closely matches my needs list. The fewer status items you own, the less you present others the opportunity to evaluate you based on what you have. The less you seek to acquire, the more you spend time (and money) on things that give you a genuine sense of self-worth and overall satisfaction with your life. (It also gives you less stuff that needs cleaning and maintenance!)
When acquisition and ownership are a source of comparative value for people, no lasting happiness is created. If ownership of a status item is the source of self-esteem, then self-esteem lasts only as long as the item confers status. That period of time is so short that nobody who buys a lot of stuff is going to be happy for long.